KPMG: Mid-Market Companies Predict Rise in Revenue, CAPEX

Middle-market business executives predict an improved U.S. economy next year, and the vast majority says their companies are adding employees and enjoying stronger revenue, according to KPMG’s 2013 Mid-Market Outlook Survey.

According to the survey, 73% of executives say revenues are up from prior year, a significant increase from 58% who reported such increases in KPMG’s 2012 survey, and 78% predict revenues will continue to rise in 2014.

Executives are equally optimistic on hiring. In fact, 45% say they’ve added headcount since last year, and 55% say they’ll hire in 2014, including 11% that expect to increase personnel by more than 7% over current levels.

More than a third (41%) indicate that they plan to raise or refinance capital/debt this year, an indication that they are ready to put money back into the driving growth. In fact, 60% plan to increase capital spending over the next year, though publicly held companies (66%) are more bullish than privately held companies (58%). The highest priority investment area is geographic expansion, cited by 48% of the executives in the KPMG survey. Additionally, executives indicate that their top strategic initiatives for company management are significant investments in organic growth and entering into new markets.

Other significant areas of investment for mid-market companies are information technology (31%), including the use of cloud technology and data and analytics; new products or services (26%); and the acquisition of a business (26%). Supporting the investment in acquisition findings, more than half of the executives (54%) say their companies will likely be involved in a merger/acquisition in the next year.